The Challenges of Shared Services in Government

March 8, 2018

In the private sector, implementing shared services is a common strategy to help mid to large size companies scale service delivery. With shared services, companies are able to lower administrative costs and improve the consistency of back office service levels. These same advantages hold true for government organizations as well. Large governmental organizations, particularly at the state and federal level, face the same challenges as private sector companies. Just like large businesses, governments have to scale services to support vast geographical areas and frequently silo’d vertical business units for which IT, HR, and other back office functions are not core services.

Despite the advantages of shared services it is observed that government is frequently hesitant to embrace shared services. The reasons for this are the same obstacles that private sector companies face, whether it be legacy thinking, fear of change, or territorial decision making. Private companies have an easier time overcoming this resistance because employees often have a financial stake in the success of the entire organization. For government to achieve similar results a strong emphasis needs to be placed on the culture and mission, with effective tops down leadership driving adoption of the change at the agency level.

In the Ricketts administration we are beginning to see the results of our shared services strategy thanks to an enterprise wide focus on our mission to create more efficient, effective, and customer focused state government. A great example of Nebraska’s shared services success story has been the multi-year journey on IT consolidation. The Office of the CIO has consolidated Desktop and Infrastructure support to save tax-payer money while improving the security and up time of the State’s IT infrastructure. Similarly our Department of Administrative Services is in the early stages of providing centralized payroll and assisted HR support for our smaller agencies. These efforts build on some of the legacy shared services operations including employee relations, compensation, and benefits administration support. The early results are in: Shared services has contributed to helping us reduce the size of government, create room in the budget for tax relief, and still improve on our services our citizens. This is another great example of how government can be run more like a business.

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Grateful for the unanimous and bi-partisan legislative support for my confirmation as Nebraska's Administrative Services Director. Excited to continue delivering on @GovRicketts efforts to create more effective, efficient, and customer focused government. https://t.co/JlGosE4Mv6

Proud of what weve achieved these past several years as a #GovHR function & excited abt the opportunity to promote @GovRicketts operational excellence objectives across gov. We are going to continue to efficiently improve customer service so we can pass savings back to taxpayers.

.@ArmyWP_Football beat @NavyFB this weekend, so for the 3rd straight year, NE Chief HR Officer @jasonjacksonNE (@NavalAcademy grad) made good on his friendly wager with @NEVetsAffairs Dir. Hilgert (@USArmy vet) + sang the Army fight song at the Capitol. #ArmyNavyGame